Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.

Yes
x

No
o

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.

Large
accelerated filero

Accelerated
filerx

Non-accelerated
filero

(Do
not check if a smaller reporting company)

Smaller
reporting companyo

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).

Yes
o

No
x

APPLICABLE
ONLY TO CORPORATE ISSUERS:

12,669,526
shares of voting common stock of $0.01 par value as of August 1,
2008

TABLE
OF CONTENTS

PART
I FINANCIAL
INFORMATION

Page

Item
1

Financial
Statements (Unaudited).

Condensed
Consolidated Statements of Income for the three and six months ended June
30, 2008 and 2007.

4

Condensed
Consolidated Balance Sheets at June 30, 2008 and December 31,
2007.

5

Condensed
Consolidated Statements of Cash Flows for the six months ended June 30,
2008 and 2007.

6

Notes
to Condensed Consolidated Financial Statements.

7

Item
2

Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.

11

Item
3

Quantitative
and Qualitative Disclosures About Market Risk.

17

Item
4

Controls
and Procedures.

19

PART
II OTHER
INFORMATION

Item
1

Legal
Proceedings.

20

Item
1A

Risk
Factors

20

Item
2

Unregistered
Sales of Equity Securities and Use of Proceeds.

20

Item
3

Defaults
Upon Senior Securities.

20

Item
4

Submission
of Matters to a Vote of Security Holders.

20

Item
5

Other
Information.

21

Item
6

Exhibits.

21

Signatures.

22

Note
Regarding Forward Looking Statements:

This Form
10-Q and other reports filed by the Company from time to time with the
U.S. Securities and Exchange Commission (the "SEC"), as well as the
Company's press releases, contain or may contain forward-looking
statements. The information provided is based upon beliefs of, and
information currently available to, the Company's management, as well as
estimates and assumptions made by the Company's
management. Statements that are not statements of historical fact may
be deemed to be forward-looking statements. Forward-looking
statements can be identified by the use of forward-looking terminology such as
"believes," "may," "should," "anticipates," "estimates," "expects," "future,"
"intends," "hopes," "plans," or the negative thereof. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause actual results of the Company to vary materially
from historical results or from any future results expressed or implied in such
forward-looking statements.

Any
statements contained in this Form 10-Q that do not describe historical facts,
including without limitation statements concerning expected revenues, earnings,
product introductions and general market conditions, may constitute
forward-looking statements. Any such forward-looking statements
contained herein are based on current expectations, but are subject to a number
of risks and uncertainties that may cause actual results to differ materially
from expectations. The factors that could cause actual future results
to differ materially from current expectations include, but are not limited to,
the following: the Company's ability to raise the financing required to support
the Company's operations; the Company's ability to establish its intended
operations; fluctuations in demand for the Company's products and services; the
Company's ability to manage its growth; the Company's ability to attract
customers; and the ability of the Company to compete successfully in the future.
Any forward-looking statements should be considered in light of those
factors.

The
Company files periodic reports with the SEC, as well as current reports on Form
8-K, proxy or information statements and other reports required of publicly held
reporting companies. The public may read and copy any materials the
Company files with the SEC at the SEC's Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. The public may obtain information on
the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains
the reports, proxy and information statements, and other information that the
Company files electronically with the SEC, which is available on the Internet at
www.sec.gov. Further information about the Company and its subsidiary
may be found at www.lsrinc.net.

Life
Sciences Research, Inc. ("LSR") and subsidiaries (collectively, the "Company")
is a global contract research organization, offering worldwide pre-clinical and
non-clinical testing services for biological safety evaluation research to the
pharmaceutical and biotechnology, as well as the agrochemical and industrial
chemical companies.

2. SIGNIFICANT
ACCOUNTING POLICIES

Basis
of Presentation

The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation
S-X. Accordingly, these financial statements do not include all of
the information and footnotes required by accounting principles generally
accepted in the United States of America. The Company has included all normal
recurring adjustments, which are, in the opinion of management, necessary to
give a fair statement of its consolidated financial position, results of
operations and cash flows for the interim periods shown.

The
condensed consolidated financial statements are unaudited and are subject to
such year-end adjustments as may be considered appropriate and should be read in
conjunction with the historical consolidated financial statements of LSR for the
years ended December 31, 2007, 2006 and 2005 included in LSR's Annual Report on
Form 10-K for the fiscal year ended December 31, 2007. The
December 31, 2007 condensed consolidated balance sheet data was derived
from audited financial statements. Operating results for the three
and six month periods ended June 30, 2008 are not necessarily indicative of the
results that may be expected for the year ending December 31, 2008.

Consolidation

The
consolidated financial statements incorporate the accounts of LSR and each of
its subsidiaries. All intercompany balances have been eliminated upon
consolidation.

Use
of Estimates

The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the dates
of the financial statements and the results of operations during the reporting
periods. These also include management estimates in the calculation
of pension liabilities covering discount rates, return on plan assets and other
actuarial assumptions. Although these estimates are based upon
management’s best knowledge of current events and actions, actual results could
differ from those estimates.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June
30, 2008 and 2007

(Unaudited)

Recently
Issued Accounting Standards

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157, Fair Value Measurements (“SFAS 157”). SFAS 157 provides a common
definition of fair value and establishes a framework to make the measurement of
fair value in generally accepted accounting principles more consistent and
comparable. SFAS 157 also requires expanded disclosures to provide
information about the extent to which fair value is used to measure assets and
liabilities, the methods and assumptions used to measure fair value, and the
effect of fair value measures on earnings. SFAS 157 is effective for
fiscal years beginning after November 15, 2007 (2008 fiscal year), although
early adoption is permitted. In February 2008, the FASB formally
provided a one-year deferral for the implementation of SFAS 157 only with regard
to certain nonfinancial assets and liabilities (2009 fiscal year). The Company
has not yet determined the impact, if any, of SFAS 157 on the Company’s
consolidated results of operations or financial position.

In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159
allows entities the option to measure eligible financial instruments at fair
value as of specified dates. Such election, which may be applied on
an instrument by instrument basis, is typically irrevocable once
elected. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The Company does not expect SFAS 159 to have
a material effect on the Company’s consolidated results of operations or
financial position.

In
December 2007, the FASB issued FAS 141(R), "Business Combinations - a
replacement of FASB Statement No. 141", which significantly changes the
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any non-controlling interest in the
acquiree. The statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This
statement is effective prospectively, except for certain retrospective
adjustments to deferred tax balances, for fiscal years beginning after
December 15, 2008. This statement will be effective for the
Company beginning in fiscal year 2009. The Company is currently
evaluating FAS 141(R), and has not yet determined the impact if any, FAS 141(R)
will have on its consolidated results of operations or financial
position.

3. SEGMENT
ANALYSIS

The
Company operates within two segments based on geographical markets, the United
Kingdom and the United States, and incurs corporate administrative
expenses. The Company has one continuing activity, Contract Research,
throughout these periods.

Transactions
between segments, which are immaterial, are carried out on an arms-length
basis. Interest income, interest expense and income taxes are also
not reported on an operating segment basis because they are not considered in
the performance evaluation by the Company's chief operating
decision-maker.

The
analysis of the Company's net revenues and operating income by segment for the
three and six month periods ended June 30, 2008 and June 30, 2007 is as
follows:

Three
months ended June 30

Six
months ended

June
30

(Dollars
in thousands)

2008

2007

2008

2007

Net
revenues

UK

US

$50,949

$45,726

$100,551

$89,022

13,381

12,465

27,006

23,466

Corporate

-

-

-

-

$64,330

$58,191

$127,557

$112,488

Operating
income

UK

$10,443

$8,179

$20,322

$15,178

US

2,497

2,095

4,922

3,320

Corporate

(2,913)

(2,748)

(5,553)

(4,753)

$10,027

$7,526

$19,691

$13,745

4. DEBT

On March
2, 2006, the Company entered into a $70 million loan (the “March 2006
Financing”) under the terms of a Financing Agreement dated March 1, 2006 with a
third party lender. The loan matures on March 1, 2011 and had an
interest rate of LIBOR + 825 basis points (which reduced to LIBOR + 800 basis
points upon the Company meeting certain financial tests). On August
1, 2007 the Company entered into an amendment to the March 2006 Financing (the
“Amended March 2006 Financing”) in which the principal amount was reduced to $60
million and the interest rate was reduced from the reduced rate of LIBOR + 800
basis points to LIBOR + 350 basis points. On November 30, 2007, the
Company entered into a second amendment to the March 2006 Financing (the “Second
Amended March 2006 Financing”) in which certain financial covenants were
modified and consent was given by the lender to permit the Company to complete a
fold-in acquisition. The original and amended loans have a LIBOR
floor set at 425 basis points. LIBOR has fallen below 425 basis
points for part of 2008 resulting in the interest rate being fixed at 775 basis
points (the LIBOR floor of 425 basis points plus 350 basis points) for some of
the months during 2008.

5. RELATED
PARTY TRANSACTIONS

On June
14, 2005, the Company entered into and consummated with Alconbury Estates Inc.
and subsidiaries (collectively “Alconbury”) a sale/leaseback transaction (the
"Sale/Leaseback Transaction"), in which the Company sold to Alconbury its
three properties (two in the UK, one in the US) for an aggregate
consideration of $40 million and immediately leased back the properties under 30
year leases with an aggregate annual rental payment of approximately $5
million. Alconbury was newly formed in June 2005 and controlled by
LSR’s Chairman and CEO, Andrew Baker. Since the Sale/Leaseback
Transaction was with a related party (Mr. Baker, LSR’s Chairman and CEO and the
controlling owner of Alconbury), an Independent Committee of LSR’s Board of
Directors (the “Committee”) was formed to analyze and consider the proposed
Sale/Leaseback Transaction. The Company agreed to pay the expenses
incurred by Alconbury in the Sale/Leaseback Transaction of $4.6 million, subject
to Alconbury's obligation to reimburse those expenses in the future in five
annual 20% installments beginning in June 2008. Alconbury paid the Company
approximately $1 million of those expenses in June 2008 in the first such
installment.

6. COMMITMENTS

The
Compensation Committee approved and adopted at its December 6, 2006 meeting the
2007 Long Term Incentive Plan (the “2007 LTIP”), which provides for awards of
cash compensation to executive officers and other members of the senior
management team if certain performance goals are achieved during the 2007-2009
performance period. The Compensation Committee established a 16%
operating margin percentage to be achieved over any four consecutive quarters
during such performance period that would trigger such awards. The
aggregate amount payable to all participants under the 2007 LTIP if the
threshold performance level is achieved is approximately $5
million.

Management
will be ratably accruing, as compensation expense, an amount equal to the
estimated cash bonus that would be payable over the performance period during
which the specified performance goals are achieved. Management will
re-evaluate this estimate periodically throughout the performance period and, if
applicable, will adjust the estimate accordingly.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

ITEM
2

MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The
following discussion of the Company’s financial condition and results of
operations should be read together with the financial statements and related
notes, which are included elsewhere in this Quarterly Report on Form
10-Q. This discussion contains forward-looking statements based upon
current expectations that involve risks and uncertainties. The Company’s actual
results may differ materially from those anticipated in these forward-looking
statements as a result of various factors, including those set forth in more
detail in its 2007 Annual Report on Form 10-K. The Company undertakes
no obligation to update any information in its forward-looking
statements.

OVERVIEW
OF THE COMPANY'S BUSINESS

The
Company provides pre-clinical and non-clinical biological safety evaluation
research services to most of the world’s leading pharmaceutical and
biotechnology companies, as well as many agrochemical and industrial chemical
companies. The purpose of this safety evaluation is to identify risks
to humans, animals or the environment resulting from the use or manufacture of a
wide range of chemicals, which are essential components of our clients'
products. The Company’s services are designed to meet the regulatory
requirements of governments around the world.

The
Company’s aim is to develop its business within these markets, principally in
the pharmaceutical sector, and through organic growth. In doing so, the Company
expects to benefit from strong drug pipelines in the pharmaceutical industry and
a growing trend towards greater outsourcing as clients focus more internal
resources on research and increasingly look to variabilize their development
costs.

CRITICAL
ACCOUNTING POLICIES AND ESTIMATES

The
following discussion and analysis of the Company’s financial condition and
operating results is based on the Company’s financial statements. The
preparation of this Quarterly Report requires the Company to make estimates and
assumptions that affect the reported amount of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the Company’s
financial statements, and the reported amount of revenue and expenses during the
reporting period. Actual results may differ from those estimates and
assumptions. See “Notes to Unaudited Condensed Financial Statements”
in Part I of this Quarterly Report for a presentation of the Company’s
significant accounting policies. No changes have been made to the
Company’s critical accounting policies and estimates disclosed in its 2007
Annual Report on Form 10-K.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

RESULTS
OF OPERATIONS

Three
months ended June 30, 2008 compared with three months ended June 30,
2007.

Net
revenues for the three months ended June 30, 2008 were $64.3 million, an
increase of 10.5% on net revenues of $58.2 million for the three months ended
June 30, 2007. The underlying increase, after adjusting for the
impact of the movement in exchange rates was 11.1%; with the UK showing a 12.2%
increase and the US a 7.3% increase. The increase in revenues
reflects the increase in orders and, consequently, backlog over the last 2
years.

Cost of
sales for the three months ended June 30, 2008 were $43.5 million (67.6% of
revenue), an increase of 7.7% on cost of sales of $40.4 million (69.4% of
revenue) for the three months ended June 30, 2007. The underlying
increase, after adjusting for the impact of the movement in exchange rates was
8.2% with the UK showing a 8.6% increase and the US a 6.8%
increase. The decrease in cost of sales as a % of revenue was due to
a reduction of 110 basis points in direct study costs as a % of revenue as a
result of a change in the mix of business, and a 70 basis points reduction in
overhead costs as a % of revenues as capacity utilization continues to
improve.

Selling,
general and administrative expenses (SG&A) increased by 5.3% to $10.8
million for the three months ended June 30, 2008 from $10.3 million in the
corresponding period in 2007. The underlying increase, after
adjusting for the impact of the movement in exchange rates was
5.8%. That increase in costs was due to an increase in incentive
accruals as a result of improved performance and an increase in staff costs to
match the expansion of the business.

Net
interest expense decreased by 10.0% to $2.4 million for the three months ended
June 30, 2008 from $2.7 million for the three months ended June 30,
2007. Of the decrease of $0.3 million, $0.9 million relates to a
decrease in interest expense associated with the $10 million reduction in the
principal of the March 2006 Financing and the reduced interest rate associated
with the Amended March 2006 Financing, offset by a $0.6 million decrease in
interest income.

Other
expense of $0.5 million for the three months ended June 30, 2008 comprised
finance arrangement fees of $0.5 million. In the three months
ended June 30, 2007 there was other income of $0.7 million which comprised $1.1
million from the non-cash foreign exchange re-measurement gain on the March 2006
Financing denominated in US dollars (the functional currency of the financial
subsidiary that holds the loan is UK sterling) and other exchange gains of $0.2
million, offset by finance arrangement fees of $0.6 million.

Income
tax benefit for the three months ended June 30, 2008 was $0.1 million. The
income tax expense for the three months ended June 30, 2007 was $0.05
million. Net operating losses are $94.7 million at June 30, 2008, with net
operating losses in the US of $8.1 million and net operating losses in the UK of
$86.6 million.

Net
income for the three months ended June 30, 2008 was $7.3 million compared with
net income of $5.5 million for the three months ended June 30,
2007. The increase in net income of $1.8 million is due to a $2.5
million increase in operating income, a decrease in the net interest expense of
$0.3 million and a decrease in non-cash finance arrangement fees of $0.1
million, an increase in the income tax benefit of $0.2 million, offset by a
decrease in non-cash foreign exchange re-measurement gain of $1.3
million.

Net
income per outstanding common share for the three months ended June 30, 2008 was
58 cents, compared to 43 cents income in the three months ended June 30, 2007,
on the weighted average common shares outstanding of 12,655,038 and 12,774,810
respectively. Net income per fully diluted share for the three months
ended June 30, 2008 was 47 cents, compared to 36 cents in the three months ended
June 30 2007, on the weighted average fully diluted common shares outstanding of
15,559,193 and 15,131,240 respectively.

Six
months ended June 30, 2008 compared with six months ended June 30,
2007.

Net
revenues for the six months ended June 30, 2008 were $127.6 million, an increase
of 13.4% on net revenues of $112.5 million for the six months ended June 30,
2007. The underlying increase, after adjusting for the impact of the
movement in exchange rates was 13.1%; with the UK showing a 12.6% increase and
the US a 15.1% increase. The increase in revenues reflects the
increase in orders and, consequently, backlog over the last 2
years.

Cost of
sales for the six months ended June 30, 2008 were $86.9 million (68.1% of
revenue), an increase of 7.7% on cost of sales of $80.7 million (71.7% of
revenue) for the six months ended June 30, 2007. The underlying
increase, after adjusting for the impact of the movement in exchange rates was
7.4% with the UK showing a 6.6% increase and the US a 10.3%
increase. The decrease in cost of sales as a % of revenue was due to
a reduction of 170 basis points in direct study costs as a % of revenue as a
result of a change in the mix of business, and a 220 basis points reduction in
overhead costs as a % of revenues as capacity utilization continues to
improve.

Selling,
general and administrative expenses (SG&A) increased by 16.3% to $21.0
million for the six months ended June 30, 2008 from $18.0 million in the
corresponding period in 2007. The underlying increase, after
adjusting for the impact of the movement in exchange rates was
16.2%. That increase in costs was due to an increase in incentive
accruals as a result of improved performance, higher employee stock option
expenses and an increase in staff costs to match the expansion of the
business.

Net
interest expense decreased by 17.5% to $4.7 million for the six months ended
June 30, 2008 from $5.7 million for the six months ended June 30,
2007. Of the decrease of $1.0 million, $1.6 million relates to a
decrease in interest expense associated with the $10 million reduction in the
principal of the March 2006 Financing and the reduced interest rate associated
with the Amended March 2006 Financing, offset by a $0.6 million decrease in
interest income.

Other
expense of $1.0 million for the six months ended June 30, 2008 comprised finance
arrangement fees of $0.9 million and $0.1 million from the non-cash foreign
exchange re-measurement loss on the March 2006 Financing denominated in US
dollars (the functional currency of the financial subsidiary that holds the loan
is UK sterling). In the six months ended June 30, 2007 there was
other income of $0.3 million which comprised $1.2 million from the non-cash
foreign exchange re-measurement gain on the March 2006 Financing denominated in
US dollars and other exchange gains of $0.2 million, offset by finance
arrangement fees of $1.1 million.

Income
tax benefit for the six months ended June 30, 2008 was $0.05 million. The
income tax benefit for the six months ended June 30, 2007 was $0.7
million.

Net
income for the six months ended June 30, 2008 was $14.0 million compared with
net income of $9.0 million for the six months ended June 30,
2007. The increase in net income of $5.0 million is due to a $5.9
million increase in operating income, a decrease in the net interest expense of
$1.0 million and a decrease in non-cash finance arrangement fees of $0.2
million, offset by a decrease in the income tax benefit of $0.7 million and a
decrease in non-cash foreign exchange re-measurement gain of $1.4
million.

Net
income per outstanding common share for the six months ended June 30, 2008 was
$1.11, compared to 70 cents income in the six months ended June 30, 2007, on the
weighted average common shares outstanding of 12,644,034 and 12,778,576
respectively. Net income per fully diluted share for the six months
ended June 30, 2008 was 91 cents, compared to 59 cents in the six months ended
June 30, 2007, on the weighted average fully diluted common shares outstanding
of 15,480,308 and 15,073,419 respectively.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

LIQUIDITY
& CAPITAL RESOURCES

Cash
and Cash Equivalents

During
the six months ended June 30, 2008 funds used were $2.2 million, decreasing cash
and cash equivalents from $32.3 million at December 31, 2007 to $30.1 million at
June 30, 2008. The decrease in cash for the six months ended June 30,
2008 was primarily caused by the increase in DSOs which utilized $5.7 million,
and by capital expenditure exceeding depreciation and amortization by $4.9
million. These offset cash generated by the strong operating
performance in the period and the $3.9 million generated from the sale of
short-term investments. There were further payments during the period
of $1.8 million regarding the small fold in acquisition and $1.2 million
repayments of long term borrowings.

Net days
sales outstanding ("DSOs") at June 30, 2008 were 21 days, a decrease from the 23
days at March 31, 2008 (8 days at June 30, 2007 and 13 days at December 31,
2007). DSOs are calculated as a sum of accounts receivables, unbilled
receivables and fees in advance over total net revenue. Over the last
5 years, DSOs at the quarter ends have varied from 2 days to 23
days. The impact on liquidity from a one-day change in DSO is
approximately $713,000.

On March
2, 2006, the Company entered into a financing agreement (the “March 2006
Financing”) which matures on March 1, 2011. On November 30, 2007, the
Company entered into a second amendment to the March 2006 Financing (the “Second
Amended March 2006 Financing”) in which certain financial covenants were
modified and consent was given by the lender to permit the Company to complete a
fold-in acquisition.

LIFE
SCIENCES RESEARCH, INC. AND
SUBSIDIARIES

OFF-BALANCE
SHEET ARRANGEMENTS

As of
June 30, 2008, the Company did not engage in any off-balance sheet arrangements
as defined in Item 303 (a) (4) of Regulation S-K under the Securities Act of
1934, as amended, that have, or are likely to have, a material current or future
effect on its consolidated financial position or results of
operations.

Recently
Issued Accounting Standards

In
September 2006, the FASB issued Statement of Financial Accounting Standards No.
157, Fair Value Measurements (“SFAS 157”). SFAS 157 provides a common
definition of fair value and establishes a framework to make the measurement of
fair value in generally accepted accounting principles more consistent and
comparable. SFAS 157 also requires expanded disclosures to provide
information about the extent to which fair value is used to measure assets and
liabilities, the methods and assumptions used to measure fair value, and the
effect of fair value measures on earnings. SFAS 157 is effective for
fiscal years beginning after November 15, 2007 (2008 fiscal year), although
early adoption is permitted. In February 2008, the FASB formally
provided a one-year deferral for the implementation of SFAS 157 only with regard
to certain nonfinancial assets and liabilities (2009 fiscal
year). The Company has not yet determined the impact, if any, of SFAS
157 on the Company’s consolidated results of operations or financial
position.

In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159
allows entities the option to measure eligible financial instruments at fair
value as of specified dates. Such election, which may be applied on
an instrument by instrument basis, is typically irrevocable once
elected. SFAS 159 is effective for fiscal years beginning after
November 15, 2007. The Company does not expect SFAS 159 to have
a material effect on the Company’s consolidated results of operations or
financial position.

In
December 2007, the FASB issued FAS 141(R), "Business Combinations - a
replacement of FASB Statement No. 141", which significantly changes the
principles and requirements for how the acquirer of a business recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any non-controlling interest in the
acquiree. The statement also provides guidance for recognizing and
measuring the goodwill acquired in the business combination and determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. This
statement is effective prospectively, except for certain retrospective
adjustments to deferred tax balances, for fiscal years beginning after
December 15, 2008. This statement will be effective for the
Company beginning in fiscal year 2009. The Company is currently
evaluating FAS 141(R), and has not yet determined the impact if any, FAS 141(R)
will have on its consolidated results of operations or financial
position.

The
consolidated financial statements of LSR are denominated in US
dollars. Changes in exchange rates between the UK pounds sterling and
the US dollar will affect the translation of the UK subsidiary's financial
results into US dollars for the purposes of reporting the consolidated financial
results. The process by which each foreign subsidiary's financial
results are translated into US dollars is as follows: income statement accounts
are translated at average exchange rates for the period; balance sheet asset and
liability accounts are translated at end of period exchange rates; and capital
accounts are translated at historical exchange rates and retained earnings are
translated at weighted average of historical rates. Translation of
the balance sheet in this manner affects the stockholders' equity account,
referred to as the accumulated other comprehensive loss. Management
has decided not to hedge against the impact of exposures giving rise to these
translation adjustments as such hedges may impact upon the Company's cash flow
compared to the translation adjustments which do not affect cash flow in the
medium term.

The
Company operates on a worldwide basis and generally invoices its clients in the
currency of the country in which it operates. Thus, for the most
part, exposure to exchange rate fluctuations is limited as sales are denominated
in the same currency as costs. Trading exposures to currency
fluctuations do occur as a result of certain sales contracts, performed in the
UK for US clients, which are denominated in US dollars and contribute
approximately 9% of total net revenues. Management has decided not to
hedge against this exposure.

Also,
exchange rate fluctuations may have an impact on the relative price
competitiveness of the Company vis á vis competitors who trade in currencies
other than sterling or dollars.

The
Company has debt denominated in US dollars, whereas the Company’s functional
currency is the UK pound sterling, which results in the Company recording other
income/loss associated with US dollars debt as a function of relative changes in
foreign exchange rates. The Company is unable to predict whether it
will experience future gains or future losses from such exchange-related risks
on the debt. To manage the volatility relating to these exposures,
from time to time, the Company might enter into certain derivative
transactions. The Company holds and issues derivative financial
instruments for economic hedging purposes only. There were no
derivative financial instruments in place at June 30, 2008.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

Exchange
rates for translating sterling into US dollars were as follows:

At
December 31

At
June 30

3
months to June 30

Average
rate (1)

6
months to June 30

Average
rate (1)

2006

1.9572

1.8496

1.8271

1.7896

2007

1.9906

2.0064

1.9858

1.9694

2008

-

1.9902

1.9719

1.9752

(1)

Based
on the average of the exchange rates on each day of each month during the
period.

On August
1, 2008 the noon buying rate for sterling was £1.00 = $1.9743.

The
Company has not experienced difficulty in transferring funds to and receiving
funds remitted from those countries outside the US or UK in which it operates
and management expects this situation to continue.

The
following table summarizes the financial instruments denominated in currencies
other than the US dollar held by LSR and its subsidiaries as of June 30,
2008:

Expected
Maturity Date

2008

2009

2010

2011

2012

There

after

Total

Fair
Value

(In
US Dollars, amounts in thousands)

Cash

-
Pound Sterling

12,025

-

-

-

-

-

12,025

12,025

-
Euro

904

-

-

-

-

-

904

904

-
Japanese Yen

3,978

-

-

-

-

-

3,978

3,978

Accounts
receivable

-
Pound Sterling

23,923

-

-

-

-

-

23,923

23,923

-
Euro

1,861

-

-

-

-

-

1,861

1,861

-
Japanese Yen

2,429

-

-

-

-

-

2,429

2,429

Capital
leases

-
Pound Sterling

259

-

-

-

-

8,339

8,598

8,598

LIBOR

In the
three and six months ended June 30, 2008, a 1% change in LIBOR would have
resulted in a fluctuation in interest expense of $145,000 and $290,000
respectively.

Revenue

For the
three and six months ended June 30, 2008, approximately 70% of the Company’s net
revenues were from outside the US.

See
Management’s Discussion and Analysis of Financial Condition and Results of
Operations.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

ITEM
4

CONTROLS
AND PROCEDURES

As of
June 30, 2008 an evaluation was carried out, under the supervision and with the
participation of management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures pursuant to Exchange Act Rule
13a-15. Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company’s disclosure controls and
procedures were effective as of the quarter ended June 30, 2008 in timely
alerting them to material information relating to the Company (including its
consolidated subsidiaries) required to be included in its periodic SEC
filings. During the quarter ended June 30, 2008 there were no
significant changes in internal controls or in other factors that have
materially affected, or are reasonably likely to materially affect, internal
controls over financial reporting.

LIFE
SCIENCES RESEARCH, INC. AND SUBSIDIARIES

PART
II
OTHER INFORMATION

Item
1. Legal Proceedings.

The
Company is party to certain legal actions arising out of the normal course of
its business. In management's opinion, none of these actions will
have a material effect on the Company's operations, financial condition or
liquidity. No form of proceedings has been brought, instigated or is
known to be contemplated against the Company by any governmental
agency.

Item
1A. Risk Factors

The
Company’s business is subject to a number of risks and uncertainties, which are
discussed in detail in Part I, Item 1A of its 2007 Annual Report on Form
10-K. There were no material changes to the Company’s risk factors
during the period covered by this Quarterly Report on Form 10-Q.

Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.

Not
applicable.

Item
3. Defaults Upon Senior Securities.

Not
applicable.

Item
4. Submission of Matters to a Vote of Security Holders.

(a) The
2007 Annual Meeting of Stockholders of the Company (the "Annual Meeting") was
held on May 21, 2008.

(b) See
item 4 (c)(i) below.

(c) The
following matter was voted on at the Annual Meeting:

(i) The
election of its 5 directors to serve until the next annual meeting of
stockholders and the election and qualification of their respective
successors:

Director Name

For

Withhold

Abstain

Andrew
Baker

9,805,402

65

253,094

Gabor
Balthazar

9,775,546

65

282,950

Brian
Cass

9,713,283

65

345,213

Afonso
Junqueiras

9,839,016

65

219,480

Yaya
Sesay

9,764,120

65

294,376

Item
5. Other Information.

Not
applicable.

Item
6. Exhibits.

Exhibit
31.1

Rule 13a-14(a)
Certification of the Chief Executive Officer

Exhibit
31.2

Rule 13a-14(a)
Certification of the Chief Financial Officer

Exhibit
32.1

Certification
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive
Officer and Chief Financial Officer